Artificial intelligence is reshaping the economy at a speed that’s hard to grasp. While many leaders are still debating what future AI disruption will look like, the shift is already here. McKinsey reports that 78% of global companies are using AI, and Datareportal estimates that over one billion people worldwide use standalone AI platforms each month. This accelerated adoption is already transforming how we work, learn and connect.
Aubrie Pagano, General Partner at Alpaca VC, has a name for the world we’re heading into: the Aquarius Economy. In a new white paper, she imagines what happens when intelligence itself becomes cheap and abundant, forcing humans to demonstrate their value elsewhere.
Pagano’s framework is as much about leadership as it is about economics. As AI automates more of what we do, she argues, leaders must focus on sustaining agency, belonging, and meaning in the workplace.
Redefining Human Agency
For most of modern history, economic progress has been tied to efficiency. We’ve measured output, optimized processes, and rewarded scale. But AI changes that equation by making optimization nearly free. When technology can execute tasks faster and better than people, Pagano argues that the comparative advantage of humans moves from technique to Spirit—the uniquely human qualities of empathy, creativity and intuition.
“For leaders, it’s not just about leading with Spirit,” she told me. “It’s also about investing in human agency preservation in the workplace. This means creating spaces and services that allow people to express efficacy, build relationships, and find meaning beyond pure productivity.”
The paper draws from positive psychology to define human agency as a set of beliefs:
- Efficacy: I can do things.
- Optimism: There are fruits to my labor.
- Imagination: I can dream up many things to do.
That sense of agency, she writes, is what drives progress—and it can’t be outsourced to machines. “The best way to nurture agency is to not over-rely on AGI to originate efficacy in the first place,” Pagano said. “We have to create avenues for higher-order thinking to emerge. This is best done by giving space for Spirit to grow, and for human connectedness to flourish.”
She calls for a Spirit-centered model of leadership that balances data-driven precision with deeply human connection. “Freedom comes from the harmonization of technique and Spirit,” she said. “Leaders must resist letting pure rationality and optimization dominate all organizational considerations.”
Some examples of what this might look like in practice include:
- Redesign roles for augmentation, not elimination. Use AI to handle repetitive tasks, and redeploy that saved time to mentoring, innovation, and relationship-building.
- Invest in connection as a benefit. Create structures that protect human contact—what Pagano calls loneliness insurance. Think peer support programs, sensory wellness spaces, and guaranteed check-ins during major life moments.
- Reward creation from nothing. Recognize originality, emotional labor, and care, and nurture out-of-the-box intrapreneurship.
What once might have been dismissed as “soft skills” may now be the strongest strategic differentiators in an era when technology can copy everything except the human spirit.
Leading Through the Transition
The transition to an AI-saturated economy will not be painless. Many roles—especially early-career, service, and administrative positions—will disappear faster than new ones are created. “Businesses and leaders that refuse to evolve will lose to high-agency teams using near-AGI intelligence to force-multiply their impact,” Pagano told me.
A very real danger through this transition period is an increase in workplace inequity. Without careful leadership, AI adoption could deepen divides between high-agency insiders who direct the systems and everyone else who’s directed by them.
Leaders can mitigate that by building on-ramps and guardrails. On-ramps provide pathways for displaced or underrepresented workers to gain new skills and re-enter the workforce. Guardrails ensure that hiring, promotion, and pay decisions remain transparent and fair even as automation increases.
Another key ingredient in this transition is building deeper trust between humans and machines. Pagano’s paper explores the concept of Agent-to-Human (A2H) coordination: how people and AI agents will work together. While the technical side is progressing quickly, trust and emotional resonance lag behind.
“There are still trust issues within Agent-to-Human protocols,” she shared. “While today’s A2H systems aren’t perfect, individuals, companies, and AI labs perform best when they co-exist. Trust will come from both intentional adoption and aligned focus on new protocols.”
Without that trust, she warns, we risk creating a paradox of “hyper-connected yet hyper-isolated” workers—people surrounded by intelligent systems but starved for genuine connection.
A New Set of Values
As intelligence becomes cheap, what becomes valuable? Pagano believes status will shift from material accumulation to spiritual contribution. “Worth will be measured by your ability to create original thought, genuine empathy, and authentic relationships,” she said.
Inside companies, that redefinition could reshape how success is measured. The most respected leaders may be those who generate new ideas, nurture community, and help others grow. The task of extracting maximum output is one that machines can own, while human leaders make space for a wider range of ideas and lived experiences to matter.
AI will continue to get faster, smarter, and cheaper. Rather than chasing efficiency until humans become the bottleneck, the Aquarius Economy challenges leaders to expand the definition of productivity to include imagination, empathy, and trust.
As Pagano writes, “The danger in the Aquarius Economy is not that AI replaces humans, but that we forget what makes us irreplaceable: the Human Spirit.”